Production volume for the craft segment was up 5% during the first half of 2018 according to the Brewers Association mid-year report. This shows stabilization following a 5% growth for full-year 2017.
“While more mature, the market continues to show demand for small and independent craft brewers,” said Bart Watson, chief economist, Brewers Association. “There are certainly industry headwinds, but this stabilized growth rate is reflective of the market realities that exist for brewers today.”
As of June 30, there were 6,655 active breweries, up from 5,562 during a comparable timeframe last year. An estimated 2,500 to 3,000 breweries are in planning, based on active Alcohol and Tobacco Tax and Trade Bureau (TTB) licenses.
“The data demonstrate that 2018 is on pace to have the highest number of brewery openings and closings to date. However, even as breweries close, openings continue to far outpace the number that shutter,” added Watson. “New players looking to enter the space should be aware of the constructs of the current landscape, work to differentiate themselves and will need to make quality beer to succeed.”
The half-year 5% growth was a bit of a surprise to some who have been following the industry. Most larger breweries, those in the top 50 have been struggling to stay even. And scan data from the off-premise trade has shown a 2-3$ growth trend for craft this year. The 5% increase overall for BA-defined craft seems to indicate a strong performance from the smaller “longtail” breweries and good sales in brewery tasting rooms (that don’t show up in scan data).